SunSirs: Caustic Soda Prices Rose Overall in August

Price trend

According to data monitored by SunSirs, caustic soda prices remained generally strong in August. The average price of caustic soda in Shandong Province was 861 RMB/ton at the beginning of the month and 884 RMB/ton at the end of the month, a 2.67% increase and a 7.41% increase compared to the same period last year.

On August 28, the SunSirs Chemical Industry Index was 771 points, down 1 point from the previous day, down 44.93% from its intra-cyclical high of 1,400 points (October 23, 2021), and up 28.93% from its intra-cyclical low of 598 points on April 8, 2020. (Note: The intra-cyclical period refers to the period from December 1, 2011 to the present.)

Analysis review

According to a survey conducted by SunSirs, caustic soda prices were generally firm. In Shandong, the mainstream market price for 32% ion-exchange membrane caustic soda was around 840-910 RMB/ton. In Jiangsu, prices were stable, with the mainstream market price for 32% ion-exchange membrane caustic soda being around 870-950 RMB/ton. In Inner Mongolia, prices were temporarily stable, with the mainstream market price for 32% ion-exchange membrane caustic soda being around 2,700-2,800 RMB/ton (convert to 100%). Caustic soda prices had risen this month, particularly in Shandong. Due to the recent maintenance, equipment had not yet been restored, and inventory pressure was not high for companies. Major downstream companies raised the price of liquid caustic soda, leading to rising prices across the region. Alumina purchases ere primarily on-demand, while non-aluminum purchases were primarily on-demand.

Market outlook

Analysts of SunSirs believe that caustic soda prices have recently seen a slight increase, maintaining a firm market. Domestic downstream demand remained strong, and caustic soda manufacturers faced minimal inventory pressure, with downstream companies expected to undergo maintenance. Next week, maintenance facilities in Northwest and Southwest China will resume operations, leading to an increase in load. Production will also be reduced in North China and East China, leading to a slight increase in load. Based on the balance of supply and demand, caustic soda prices are expected to maintain consolidating in the coming period, depending on downstream market demand.

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